18
QuizMultiple Choice

Credit and Loans

Question 18 • 2027 Ignite Financial Literacy-Personal Finance - EL3403

Which describes an example of using unsecured credit?

Answer
A
Someone buys new gutters for a home with a credit card.
B
Someone buys a new vehicle with a loan from a car dealer.
C
Someone buys a new home with a mortgage from a bank.
D
Someone buys a new boat with a loan from a boat dealer.

Explanation

Unsecured credit is borrowed money that is not backed by collateral. A credit card purchase for new gutters is an example because the gutters are not pledged to the credit card company as security for repayment. Vehicle and boat loans are typically secured by the vehicle or boat, and a mortgage is secured by the home.

AI-written and checked against the verified answer.

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